the acquisition of a portfolio of day nurseries in Saxony six months
ago, Warburg-HIH Invest Real Estate (“Warburg-HIH Invest”) now acquired
another four day-nurseries
under development in North Rhine-Westphalia (“NRW”). Two additional acquisitions are in an advanced planning stage. The properties will be held in the “Warburg-HIH
Zukunft Invest“ fund, the company’s new open-ended
special AIF. Once the property development is completed, the fund will
thus own ten day-nurseries worth a combined investment volume of more
than 45 million euros. The fund volume target is
100 million euros. When fully invested, the fund will include about 20
assets. The fund envisions a stable cash-on-cash yield of 4.0 to 5,0
The properties in Saxony consist of two new-build and two existing buildings with a gross lettable area of 7,500 square metres. One of these two new buildings will be completed by the end of this year, the other asset is scheduled for completion by the end of 2021. The properties are let on 25-year leases.
The assets acquired in NRW represent four day-nursery developments that are being implemented by developer TERRA Projektentwicklung. The properties are located in Bochum (two assets), Duisburg and Oberhausen. Providing a total of 395 childcare spots, they are or will be occupied on 30-year terms leases by Step Kids Education (Stepke), a blue-chip sponsor. Stepke operates a total of 25 day-nurseries in Germany. The facilities are scheduled for completion between the fourth quarter of 2021 and year-end 2022.
NRW counts among the German states with the greatest shortfall in child care spots. The care gap describes the difference between the demand rate (i. e. the number of spots actually needed) and the care ratio (i. e. the number of children actually looked after). It amounts to 19 percent in NRW, the widest gap of any state except Bremen (20.2 percent). This documents the enormous present and future requirement for daycare options for children of preschool age in NRW.
According to calculations done by the IW German Economic Institute in Cologne, the shortfall in child care spots in Germany adds up to nearly 320,000 nationwide. And this even though cities and communities created around 155,000 new day-care spots since 2014, bringing the total up to 818,000 spots. The steady growth in the number of women who accept gainful employment makes it reasonable to expect the number of children requiring day care to keep going up. This in turn translates into additional demand for childcare facilities.
Pic credit : Terra Projektentwicklung
Source : Warburg HIH Invest Real Estate